I'm Swiss-born, served as a Marine jet attack aviator in the Korean and pre-Vietnam era. I received an MBA from UC Berkeley in 1962, with highest honors. I've held top management positions at GM, BMW, Ford, Chrysler and retired from GM as Vice Chairman in 2010 at age 78. My two successful books are "Guts: The Seven Laws of Business That Made Chrysler The World's Hottest Car Company" (Jonn Wiley+Son, 1998) and, more recently, "Car Guys vs. Bean Counters: The Battle For The Soul Of American Business" (Portfolio Press, 2010) Most current book "Icons and Idiots" (Portfolio Press, 2012). I'm a contributor for Road & Track Magazine along with CNBC, and appear with some frequency on "Larry Kudlow." I serve on numerous startup boards, am a Leigh Bureau professional lecturer and provide consulting services to a number of clients. I tend to have strong opinions which I share with enthusiasm ... some would say "to a fault." My personal motto is "Often wrong, but seldom in doubt." For more information, visit my website, boblutzsez.com.

Fulsome Fossil Fuels And The 'Peak Oil' Myth

Here’s what we all know to be true: petroleum products are being consumed by an increasingly mobile world faster than foreseeable rises in production. As China puts its billion-and-change population on wheels, demand for oil, even with well-intentioned (but hopelessly inadequate) solar and wind farms in the picture, will drive scarcity. Prices will rise astronomically, giving more wealth and political clout to countries hostile to our way of life, and resulting in generalized economic chaos. Thus, it is argued, even if you don’t buy into the gospel according to The Goracle, high priest of the global warming movement, we still must convert our transportation sector away from petroleum as fast as possible, even if it isn’t economically justified.

As for the U.S., the world’s largest consumer of fossil fuel, guided by no energy policy at all (except federally mandated fuel economy regulations, the equivalent of fighting the U.S. obesity epidemic by forcing clothing manufacturers to produce only small sizes), we all know that the percentage of imported oil will continue to rise, with the attendant geopolitical and economic risks.

It was armed with this solid, generally shared knowledge that I traveled to Houston to speak at a Deloitte & Touche oil and gas conference. Luckily, I attended the morning session before my noontime talk, and thus had a chance to rewrite my speech, full of the foregoing “knowledge” as it was, as an all-new paradigm had displaced my (un)comfortable “conventional wisdom” regarding the energy world.

Company after company, executive upon oil economist, all described the coming flood of North American oil and gas discovery and production. Whether Texas shale gas or Canadian bitumen, the Bakken field in North Dakota and southern Canada, coupled with advanced new exploration and extraction technology, it was a scenario of abundance. The highly volatile liquids bubbling forth from shales are already being piped to Canada, blended with their vast amounts of tar (bitumen) to form what is referred to as “dilbit,” or diluted bitumen. The U.S. percentage of imported oil to domestic is already dropping, and will drop further.

The U.S. has gone from being a growing importer of liquefied natural gas, to the point where by 2015 we’ll be exporting loads of LNG through new terminals being built on the Gulf Coast.

A senior oil economist told of his decades-long history of regularly explaining to audiences why U.S. energy independence was a pipe dream: he now was prepared to revise his forecast: the U.S. can be fossil-fuel self-sufficient in a period of a few years! There is so much greasy, oily and gassy stuff under the surface, it seems, that it’s little wonder the oil companies aren’t bleating more over the sacrosanct off-limits status of ANWAR, or, for that matter, the Obama administration’s limitations on offshore drilling. Like, who needs it?

So, with “Peak Oil” exposed as yet another Chicken-Little fallacy, those of us who rejected the idea of CO2-caused planetary meltdown and instead embraced reduced dependence on foreign oil as a reason for widespread vehicle electrification are seemingly left with a solution, but no credible problem.

Or are we?

The fact is, the transition to petroleum independence will take time. Meanwhile, we remain at risk. A network of federal regulations mandating CO2 reductions is in place: electrification is inescapable for compliance. Finally — and in the long term, the most important — electric drive for vehicles is inherently more efficient than internal combustion, and the gap can only grow with the next generation of batteries storing five to 10 times as much energy as today’s lithium ion batteries. Economic development and national wealth creation demand adoption of the most cost-effective solution. Electric drive does not meet that criterion today, but, in a few short years, it will. We need to stay with it.

But let’s shed ourselves of the notion that “we’re running out; gotta do something quick,” or, worse, “we only have a short window in which to act before we face climatic Armageddon.”

Electrification of the transportation sector can and will succeed on its own merits.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.